Making the extensible enterprise a reality

The CIO should help identify new cloud-based business opportunities and deliver the network of business platforms to support them.

The extensible-enterprise strategy will require each member of the C-suite to stretch in some way. CEOs will need to grapple with what cloud computing can do for business growth, and CFOs will need to recognize the ramifi cations of the cloud for governance and risk. For their part, CIOs will continue to be masters of IT but will also need to acquire deeper understanding of the business opportunities the cloud provides when business processes are extended throughout the ecosystem.

This is not how CIOs typically think of the cloud today. Most see it simply as a way to make internal IT cheaper, more fl exible, and more effi cient. PwC urges CIOs to start looking at the cloud from two perspectives: as part of an extensible-enterprise strategy to drive business growth and as a strategy to improve internal IT. (The Summer 2009 issue of the Technology Forecast explores the latter, which we call Evergreen IT.)

Figure 1: The extensible enterprise is the combination of versatile processes and ecosystem integration that create a network of business platforms.
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But these two perspectives are related. In an extensible-enterprise strategy, the business’s own internal capabilities are viewed as potential business opportunities. This strategy requires internal enabling platforms—largely owned by the CIO—to function as a business platform that drives ecosystem interactions at much lower cost than previously possible. (See Figure 1.)

As described in the article, “The cloud you don’t know: An engine for new business growth,” on page 04, Amazon.com created versatile processes that allowed it to turn its internal e-commerce platform into a business platform to provision computing resources publicly. And through deep integration, Automatic Data Processing (ADP) leveraged its internal services platform to work with external partners to extend its business into new areas and create end-to-end processes for all of their customers.

Ultimately, a network of business platforms, a baseline IT infrastructure, and a set of services to be used for internal and external provisioning as separate but linked platforms will be enabled in the ecosystem. Just as the Internet is a network of networks, cloud computing will become a network of business platforms.

Pursuit of the extensible-enterprise opportunity should bring the CIO into the heart of business strategy, an area the C-suite increasingly expects CIOs to help lead. To succeed, the CIO will need to maintain his or her competence in the technical side, while becoming more fl uent in business matters.

“Cloud computing prompts a different kind of conversation on two levels,” says Sanjay Mirchandani, CIO of EMC Corporation. “First, it is a conversation about how IT can partner with the business and be proactive in driving down costs and improving levels of effi ciency. And on the second level, we are building an asset for the company that has longevity.”

Pursuit of the extensible-enterprise opportunity should bring the CIO into the heart of business strategy, an area the C-suite increasingly expects CIOs to help lead.